EXEMPT (Reprinted with amendments adopted on April 10, 2013) FIRST REPRINT A.B Referred to Committee on Government Affairs

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1 EXEMPT (Reprinted with amendments adopted on April, ) FIRST REPRINT A.B. ASSEMBLY BILL NO. ASSEMBLYMEN NEAL, HORNE; AND DALY FEBRUARY, JOINT SPONSOR: SENATOR ATKINSON Referred to Committee on Government Affairs SUMMARY Revises provisions relating to contracts with a governmental entity. (BDR -) FISCAL NOTE: Effect on Local Government: May have Fiscal Impact. Effect on the State: Yes. CONTAINS UNFUNDED MANDATE ( ) (NOT REQUESTED BY AFFECTED LOCAL GOVERNMENT) ~ EXPLANATION Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to public financial administration; establishing additional requirements and imposing limitations on certain contracts of state agencies for the performance of services; requiring state and local agencies to submit certain reports about their contracts to the Purchasing Division of the Department of Administration; requiring a public body which awards a contract for a public work to gather and maintain certain information about bidders and persons employed on the public work; requiring the Board of Regents of the University of Nevada to adopt rules relating to certain contracts of the Nevada System of Higher Education; requiring the Department of Transportation to post information about contracts between the Department and architects, engineers and other professionals; and providing other matters properly relating thereto.

2 0 Legislative Counsel s Digest: Section of this bill requires the Purchasing Division of the Department of Administration to prescribe a code of conduct for independent contractors who enter into a contract with a state agency which requires such an independent contractor to abide by all state ethics laws, maintain records of all work done pursuant to such a contract and make these records available for inspection or audit. Section of this bill requires such an independent contractor to disclose to the state agency any fees charged by the independent contractor for services within the scope of the contract to a person who is not a party to the contract and to annually report the total dollar amount of such fees. Section of this bill requires an independent contractor to disclose certain information relating to any subcontractor used to perform a contract with a state agency. Section of this bill provides that if an independent contractor violates any provision of sections -, the state agency may terminate the contract. Section of this bill: () prohibits a state agency from entering into a sole source contract for a term exceeding years unless the longer term is necessary for the recovery of capital costs; and () prohibits a state agency from renewing a sole source contract unless the State Board of Examiners approves the renewal by a twothirds vote. Section of this bill generally authorizes a state agency to enter into a contract with an independent contractor, other than a sole source contract, for a term of not more than years and to extend the term of such a contract if the State Board of Examiners approves the extension by a two-thirds vote. Section of this bill requires each state agency or the governing body of a local government that enters into a sole source contract to transmit certain information to the Purchasing Division, which must then post that information on its Internet website. Section of this bill requires each state agency or the governing body of a local government that enters into a sole source contract or renegotiates a contract with an independent contractor to report information relating to the number and dollar amount of the sole source contracts and competitively bid contracts with an independent contractor to the Purchasing Division, which must then report that information to the Interim Finance Committee. Section of this bill requires a person who is awarded a contract for a public work, under certain circumstances, to report to the public body awarding the contract certain information concerning the race, ethnicity, age and gender of certain employees on the public work. Section also requires a public body awarding a contract for a public work to gather, compile, maintain and enter on the Internet website of the State Public Works Division of the Department of Administration certain information concerning the amount of each bid, the awarding of the contract, the race, ethnicity, age and gender of certain bidders for the contract, and the information received from the person awarded the contract concerning the persons employed on the public work. Finally, section requires that the Division create an application on its Internet website for the entry of the information that each public body is required to enter on the Internet website in accordance with section, make the information available to the public and report the information annually to the Director of the Legislative Counsel Bureau. Section. of this bill requires the Board of Regents of the University of Nevada to adopt rules relating to contracts between the Nevada System of Higher Education and independent contractors, including rules providing increased opportunities for certain persons and businesses to obtain such contracts. Section of this bill requires the Department of Transportation to post certain information relating to certain contracts for the provision of professional services entered into by the Department on or after July,.

3 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section. Chapter of NRS is hereby amended by adding thereto the provisions set forth as sections to, inclusive, of this act. Sec.. As used in NRS.00 and sections to, inclusive, of this act, unless the context otherwise requires, the words and terms defined in sections to., inclusive, of this act have the meanings ascribed to them in those sections. Sec.. Independent contractor means a natural person, firm or corporation who agrees to perform services for a fixed price according to his, her or its own methods and without subjection to the supervision or control of the other contracting party, except as to the results of the work, and not as to the means by which the services are accomplished. Sec.. Public body means the governing body of a county, city or other local government. Sec.. (Deleted by amendment.) Sec.. Sole source contract means a contract entered into between a using agency or public body and an independent contractor to provide services for which the independent contractor is the only source capable of providing the services. Sec... Using agency has the meaning ascribed to it in NRS.0, except that the term does not include the Division of Health Care Financing and Policy of the Department of Health and Human Services. Sec.. Except as otherwise provided in sections and of this act, the provisions of sections to, inclusive, of this act:. Apply to any contract for services of a person as an independent contractor entered into between a using agency and an independent contractor, unless the contract for services is negotiated as part of a contract for the sale of goods with the same independent contractor.. Do not apply to any contract: (a) For a public work governed by the provisions of chapter of NRS; or (b) Between a using agency or public body and a person, firm or corporation that is subject to regulation pursuant to the provisions of title of NRS. Sec... The Purchasing Division shall prescribe by regulation a code of conduct for independent contractors. The code of conduct must include, without limitation, provisions stating that the independent contractor:

4 (a) Knows and agrees to abide by all applicable state ethics laws; (b) Agrees to maintain accurate internal records of all work done pursuant to a contract with a using agency; and (c) Agrees to make the records kept pursuant to paragraph (b) available for inspection or audit by the Legislative Auditor, the Division of Internal Audits of the Department of Administration and the State Controller.. A using agency may not enter into a contract with an independent contractor unless the independent contractor signs and agrees to abide by the code of conduct for contractors prescribed by the Purchasing Division pursuant to this section. Sec.. An independent contractor who enters into a contract with a using agency shall:. Fully disclose to the using agency any fees that will be charged by the independent contractor for services within the scope of the contract to a person who is not a party to the contract.. Report annually to the using agency the total dollar amount generated by such fees. Sec... An independent contractor who enters into a contract with a using agency shall: (a) Fully disclose to the using agency: () The name of any subcontractor used by the independent contractor to perform the contract. () The dollar amount that each subcontractor will be paid by the independent contractor. () Any fees that will be charged by the subcontractor for services within the scope of the contract to a person who is not a party to the contract. (b) Report annually to the using agency the total dollar amount generated by the fees disclosed pursuant to subparagraph () of paragraph (a).. Nothing contained in this section shall be deemed to require the disclosure or reporting of any proprietary information. Sec... Except as otherwise provided in subsection, a using agency may not enter into a sole source contract unless the term of the sole source contract does not exceed years.. A using agency may enter into a sole source contract whose term exceeds years if the longer term is necessary for the recovery of capital costs through extended amortization.. A using agency may not renew a sole source contract unless the State Board of Examiners approves the renewal by a two-thirds vote. Sec... Except as otherwise provided in subsection, a using agency may enter into a contract with an independent

5 contractor, other than a sole source contract, for a term of not more than years. Except as otherwise provided in this subsection, a contract may be extended if the State Board of Examiners approves the extension by a two-thirds vote. The Board may authorize its Clerk or a designee to approve an extension of a contract for not more than year if the extension does not require an authorization for the expenditure of any money.. With the prior written approval of the Administrator, a using agency may enter into a contract with an independent contractor, other than a sole source contract, for a term longer than years if the Administrator determines that such action is in the best interest of the State.. On or before September of each year, the Purchasing Division shall submit a written report to the Interim Finance Committee setting forth the number of contracts described in subsection which are currently in effect and, for each such contract entered into during the immediately preceding fiscal year: (a) The names of the parties to the contract; (b) The total amount to be paid by the using agency pursuant to the contract while it remains in effect; and (c) An explanation of the determination made by the Administrator pursuant to subsection. Sec... A using agency or public body that enters into a sole source contract shall transmit to the Purchasing Division information relating to the sole source contract, including, without limitation, the name of the using agency or public body, as applicable, the name of the independent contractor and a brief description of the services for which the using agency or public body entered into the sole source contract.. The Purchasing Division shall post any information received pursuant to this section on its Internet website. Sec... A using agency or public body that enters into a sole source contract or renegotiates a contract with an independent contractor shall report to the Purchasing Division before August of each year, for the immediately preceding fiscal year: (a) The number of sole source contracts entered into by the using agency or public body; (b) The number of competitively bid contracts with an independent contractor entered into by the using agency or public body; (c) The dollar amount of each sole source contract entered into by the using agency or public body;

6 (d) The dollar amount of each competitively bid contract with an independent contractor entered into by the using agency or public body; and (e) The dollar amount of savings generated by renegotiations of all contracts with an independent contractor.. The Purchasing Division shall, on or before September of each year, prepare and submit to the Interim Finance Committee a report detailing the information received pursuant to subsection for the immediately preceding fiscal year for all using agencies and public bodies. Sec.. If an independent contractor violates any provision of section, or of this act, the using agency may terminate the contract with the independent contractor. Sec... NRS.00 is hereby amended to read as follows:.00. Except as otherwise provided in NRS. [,] and sections to, inclusive, of this act, a using agency may contract for the services of a person as an independent contractor. Except as otherwise provided by specific statute, each such contract must be awarded pursuant to this chapter.. [An independent contractor is a natural person, firm or corporation who agrees to perform services for a fixed price according to his, her or its own methods and without subjection to the supervision or control of the other contracting party, except as to the results of the work, and not as to the means by which the services are accomplished..] For the purposes of this section: (a) Travel, subsistence and other personal expenses may be paid to an independent contractor, if provided for in the contract, in such amounts as provided for in the contract. Those expenses must not be paid pursuant to the provisions of NRS.0. (b) There must be no: () Withholding of income taxes by the State; () Coverage for industrial insurance provided by the State; () Participation in group insurance plans which may be available to employees of the State; () Participation or contributions by either the independent contractor or the State to the Public Employees Retirement System; () Accumulation of vacation leave or sick leave; or () Coverage for unemployment compensation provided by the State if the requirements of NRS.0 for independent contractors are met. [.]. An independent contractor is not in the classified or unclassified service of the State and has none of the rights or privileges available to officers or employees of the State of Nevada.

7 [.]. If the contract is for services for which a license, certificate, registration, permit or other type of authorization is required by law, an independent contractor must hold the appropriate, current authorization that is required by law for the services. [.]. Except as otherwise provided in this subsection, each contract for the services of an independent contractor must be in writing. The form of the contract must be first approved by the Attorney General, and except as otherwise provided in subsection [,], an executed copy of each contract must be filed with the Fiscal Analysis Division of the Legislative Counsel Bureau and the Clerk of the State Board of Examiners. The State Board of Examiners may waive the requirements of this subsection in the case of contracts which are for amounts less than $,000. [.]. Except as otherwise provided in subsection [,], and except for contracts entered into by the Nevada System of Higher Education, each proposed contract with an independent contractor must be submitted to the State Board of Examiners. The contracts do not become effective without the prior approval of the State Board of Examiners, except that the State Board of Examiners may authorize its Clerk or a designee to approve contracts which are: (a) For amounts less than $,000 or, in contracts necessary to preserve life and property, for amounts less than $,000; or (b) Entered into by the State Gaming Control Board for the purposes of investigating an applicant for or holder of a gaming license. [.]. Copies of the following types of contracts need not be filed or approved as provided in subsections [] and [:] : (a) Contracts executed by the Department of Transportation for any work of construction or reconstruction of highways. (b) Contracts executed by the State Public Works Division of the Department of Administration or any other state department or agency for any work of construction or major repairs of state buildings, if the contracting process was controlled by the rules of open competitive bidding. (c) Contracts executed by the Housing Division of the Department of Business and Industry. (d) Contracts executed with business entities for any work of maintenance or repair of office machines and equipment. [.]. The State Board of Examiners shall review each contract submitted for approval pursuant to subsection [] to consider: (a) Whether sufficient authority exists to expend the money required by the contract; and

8 (b) Whether the service which is the subject of the contract could be provided by a state agency in a more cost-effective manner. If the contract submitted for approval continues an existing contractual relationship, the State Board of Examiners shall ask each agency to ensure that the State is receiving the services that the contract purports to provide. [.]. If the services of an independent contractor are contracted for to represent an agency of the State in any proceeding in any court, the contract must require that the independent contractor identify in all pleadings the specific state agency which he or she is representing.. Notwithstanding the provisions of subsection of section of this act and without limiting the provisions of this section, the provisions of this section are applicable to a contract between a using agency and an independent contractor who is subject to regulation pursuant to the provisions of title of NRS.. The State Board of Examiners may adopt regulations to carry out the provisions of this section. Sec... NRS. is hereby amended to read as follows:.. If personnel of the Capitol Police Division of the Department of Public Safety are not available to provide security services for a building, office or other facility of a using agency, the using agency may, pursuant to NRS.00, and sections to, inclusive, of this act, contract with one or more independent contractors to provide such services.. If the Chief Justice of the Supreme Court determines that additional security is needed for the safe operation of any facility or building that is owned by or leased to the Supreme Court and occupied by its employees, the Supreme Court may contract with one or more independent contractors to provide security services for the facility or building. Any contractor with whom the Supreme Court contracts for these services is subject to the oversight of a peace officer who provides security services for the Supreme Court and who is designated and directed by the Chief Justice.. An independent contractor with whom a using agency contracts pursuant to subsection must: (a) Be licensed as a private patrol officer pursuant to chapter of NRS or employed by a person so licensed; and (b) Possess the skills required of and meet the same physical requirements as law enforcement personnel certified by the Peace Officers Standards and Training Commission created pursuant to NRS.00.. An independent contractor with whom the Supreme Court contracts pursuant to subsection must be licensed as a private

9 patrol officer pursuant to chapter of NRS or employed by a person so licensed. Sec... NRS.0 is hereby amended to read as follows:.0 As used in NRS.0 to.0, inclusive:. Employee includes an employee of a: (a) Part-time or full-time board, commission or similar body of the State or a political subdivision of the State which is created by law. (b) Charter school. (c) University school for profoundly gifted pupils described in chapter A of NRS.. Employment includes any services performed by an immune contractor.. Immune contractor means any natural person, professional corporation or professional association which: (a) Is an independent contractor with the State pursuant to NRS.00 [;] and sections to, inclusive, of this act; and (b) Contracts to provide medical services for the Department of Corrections. As used in this subsection, professional corporation and professional association have the meanings ascribed to them in NRS.0.. Public officer or officer includes: (a) A member of a part-time or full-time board, commission or similar body of the State or a political subdivision of the State which is created by law. (b) A public defender and any deputy or assistant attorney of a public defender or an attorney appointed to defend a person for a limited duration with limited jurisdiction. (c) A district attorney and any deputy or assistant district attorney or an attorney appointed to prosecute a person for a limited duration with limited jurisdiction. Sec... NRS.0 is hereby amended to read as follows:.0 The Department of Administration shall, on an annual basis, contract for the services of an independent contractor, in accordance with the provisions of NRS.00, and sections to, inclusive, of this act, to:. Review sentences imposed in this State and the practices of the State Board of Parole Commissioners and project annually the number of persons who will be: (a) In a facility or institution of the Department of Corrections; (b) On probation; (c) On parole; and (d) Serving a term of residential confinement,

10 during the years immediately following the date of the projection; and. Review preliminary proposals and information provided by the Commission and project annually the number of persons who will be: (a) In a facility or institution of the Department of Corrections; (b) On probation; (c) On parole; and (d) Serving a term of residential confinement, during the years immediately following the date of the projection, assuming the preliminary proposals were recommended by the Commission and enacted by the Legislature. Sec... NRS. is hereby amended to read as follows:.. Except if a particular procedure for resolving a dispute is required by a specific statute, and except as otherwise provided in subsection, the Director may authorize any entity within the Department or any natural person who is subject to the authority of the Director to use alternative means of dispute resolution in any proceeding if the alternative means can be: (a) Carried out by the available personnel of the Department or persons under contract with the Department; and (b) Paid for with money that is available in the existing budget of the affected entity of the Department.. Before authorizing an entity of the Department to use alternative means of dispute resolution, the Director must notify the Attorney General. The Attorney General, within days after receiving the notification from the Director, shall respond to the Director concerning the advisability of using alternative means of dispute resolution to resolve the dispute at issue. The Director shall consider the advice of the Attorney General but may authorize an entity of the Department to use alternative means of dispute resolution unless the Attorney General indicates in his or her response that he or she officially opposes the use of such means. If the Attorney General fails to respond within days after receiving the notification, the Director may authorize the use of alternative means of dispute resolution.. The alternative means of dispute resolution may include, without limitation, evaluation of the facts and issues in a dispute by a neutral person, fact-finding, mediation, arbitration or other collaborative problem-solving processes designed to encourage persons to work together to develop agreeable solutions to disputes in lieu of litigation or adjudication of contested cases in administrative hearings.. Any entity which, or natural person who, has received authorization from the Director to use alternative means of dispute

11 resolution may enter into a contract to facilitate the use of such means, subject to the approval of the Attorney General, the limitations set forth in subsection and the provisions of NRS.00 [.] and sections to, inclusive, of this act. Sec.. Chapter of NRS is hereby amended by adding thereto a new section to read as follows:. A public body which awards a contract for a public work shall: (a) Gather and maintain, for each bid submitted for the contract, the following information: () The amount of the bid; and () Whether the bidder was awarded the contract. (b) If the provisions of paragraph (b) of subsection of NRS. are applicable, gather and maintain information about the race, ethnicity, age and gender of each person identified as a principal of: () Each of the three contractors described in that paragraph; and () Each first tier subcontractor identified by those contractors pursuant to that paragraph, on the license issued to the contractor or first tier subcontractor, as applicable, pursuant to chapter of NRS. Each such contractor shall submit the information described in this paragraph within hours after the completion of the opening of the bids. (c) Include in the contract a clause requiring the person who is awarded the contract to gather, maintain and report to the public body the information required by subsection, if the provisions of that subsection are applicable. (d) Compile and maintain the information reported to the public body pursuant to subsection, if the provisions of that subsection are applicable, by the person who is awarded the contract. (e) Enter or cause to be entered through the application on the Internet website of the Division created pursuant to paragraph (a) of subsection the information which the public body: () Gathers and maintains pursuant to paragraphs (a) and (b), as applicable, within days after the opening of bids; and () Compiles and maintains pursuant to paragraph (d). (f) Deem a bid that does not contain the information that the public body is required to gather and maintain pursuant to paragraph (b), if the provisions of that paragraph are applicable, to be not responsive if the information is not submitted within the time required by that paragraph.

12 . If the provisions of paragraph (b) of subsection of NRS. are applicable, the person who is awarded the contract by the public body shall, for himself or herself and for each subcontractor identified pursuant to that paragraph: (a) Identify the race, ethnicity, age and gender, if known, of every employee who, during the duration of the contract for the public work, is on the certified payroll of: () The person who is awarded the contract; and () Each such subcontractor; and (b) Submit a report to the public body following the completion of the public work which compiles the information required by paragraph (a).. The Division shall: (a) Create an application on its Internet website for a public body to enter or cause to be entered the information gathered and maintained by the public body pursuant to subsection that does not allow for the entry of any personal information, as that term is defined in NRS 0A.0; (b) Make available to the public the information entered pursuant to paragraph (a); and (c) Report annually the information entered pursuant to paragraph (a) to the Director of the Legislative Counsel Bureau in any format requested by the Director.. For the purposes of subsection, if a person who submits a bid or otherwise competes for the contract is: (a) A design-build team, the public body must gather and maintain the required information for each member of the designbuild team. (b) Not a natural person, the public body must gather and maintain the required information, if known, for each natural person who holds a controlling interest in the person who submits the bid or otherwise competes for the contract. Sec... NRS.0 is hereby amended to read as follows:.0. The Board of Regents may prescribe rules for: (a) Its own government; and (b) The government of the System.. The Board of Regents shall prescribe rules [for] : (a) For the granting of permission to carry or possess a weapon pursuant to NRS.. (b) Requiring vendors and independent contractors who enter into contracts with the System to understand and abide by all applicable state ethics laws. (c) Providing increased opportunities for women, minorities and small, disadvantaged or local businesses, as independent contractors, to obtain contracts with the System.

13 (d) Providing for the disclosure to the public of information relating to the cost of contracts between the System and independent contractors and any fees charged pursuant to any such contract to a person who is not a party to the contract. (e) Requiring the maintenance of accurate records relating to the matters set forth in paragraphs (c) and (d). (f) Requiring the preparation and submission by the System of an annual written report to the Board of Regents concerning the activities and progress of the System in complying with the rules described in paragraphs (b) to (e), inclusive.. On or before December of each year, the Board of Regents shall submit to the Director of the Legislative Counsel Bureau, for transmittal to the Legislative Commission, the written report prepared pursuant to paragraph (f) of subsection.. As used in this section, independent contractor has the meaning ascribed to it in section of this act. Sec.. Chapter of NRS is hereby amended by adding thereto a new section to read as follows:. For any contract with a professional who is not a member of a design-build team for the provision of services entered into by the Department on or after July,, within days after entering into the contract, the Department shall post information relating to the contract on its Internet website, including, without limitation, the name of the professional, a brief description of the services for which the Department entered into the contract and the cost of the contract.. As used in this section, professional includes, without limitation, an architect, an attorney, an engineer, a landscape architect and a surveyor. Sec... NRS 0.0 is hereby amended to read as follows: 0.0. The Board may adopt a seal for its own use which must have imprinted thereon the words Board for the Regulation of Liquefied Petroleum Gas. The care and custody of the seal is the responsibility of the Secretary-Treasurer of the Board.. The Board may appoint an Executive Secretary and may employ or, pursuant to NRS.00, and sections to, inclusive, of this act, contract with such other technical, clerical or investigative personnel as it deems necessary. The Board shall fix the compensation of the Executive Secretary and all other employees and independent contractors. Such compensation must be paid out of the money of the Board. The Board may require the Executive Secretary and any other employees and independent contractors to give a bond to the Board for the faithful performance of their duties, the premiums on the bond being paid out of the money of the Board.

14 . In carrying out the provisions of NRS 0. to 0., inclusive, and holding its regular or special meetings, the Board: (a) Shall adopt written policies setting forth procedures and methods of operation for the Board. (b) May adopt such regulations as it deems necessary.. The Board shall submit to the Legislature and the Governor a biennial report before September of each even-numbered year, covering the biennium ending June of that year, of its transactions during the preceding biennium, including a complete statement of the receipts and expenditures of the Board during the period and any complaints received by the Board.. The Board shall keep accurate records, minutes and audio recordings or transcripts of all meetings and, except as otherwise provided in NRS.0, the records, minutes, audio recordings and transcripts so kept must be open to public inspection at all reasonable times. The Board shall also keep a record of all applications for licenses and licenses issued by it. The record of applications and licenses is a public record. Sec.. The Purchasing Division of the Department of Administration shall adopt any regulations required by section of this act before October,. Sec... Contracts entered into before October,, are not subject to the provisions of sections to, inclusive, of this act, and the amendatory provisions of sections. to., inclusive, and. of this act.. Contracts entered into before July,, are not subject to the provisions of sections and of this act. Sec.. The provisions of NRS. do not apply to any additional expenses of a local government that are related to the provisions of this act. Sec... This section and sections.,, and of this act become effective upon passage and approval.. Sections to., inclusive, and. of this act become effective: (a) Upon passage and approval for the purposes of adopting regulations and performing any other preparatory administrative tasks; and (b) On October,, for all other purposes.. Sections and of this act become effective on July,. H

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